Silver, known as "Poor Man's Gold," has always taken a backseat in the jewelry industry as gold reigned supreme. But these days, silver is enjoying a surge of popularity.
[Interview : ] "Silver prices have gotten so high, that it seems like silver is better than gold."
[Interview : ] "Silver is the best. It's great."
[Interview : ] "These days, there's nothing that beats silver."
With prices doubling in just one year, silver has become more precious than ever! The whole world has fallen into a silver craze.
The Jongno Jewelry District is the center of the jewelry scene in Korea. Gems and precious metals twinkle and sparkle as far as the eye can see!
These days, silver is the most popular commodity here. As prices continue their seemingly endless rise, jewelry brokers are finding themselves buying more silver than they sell! Some jewelry stores have changed altogether into specialized silver broker agencies.
[Interview : Kim Sang-gi, Manager
Silver Broker Agency] "The number of people coming to sell silver has tripled, maybe quadrupled. We used to buy silver for US$13.35 to $17.80 for 112.5 grams, and now we pay $89 to $107 for the same amount."
This market situation has greatly improved the status of old silver spoons and chopsticks lying around in homes all over Korea, which had hitherto been considered cumbersome burdens. Both sides of the transaction seem satisfied with the deal.
[Interview : Nam Hae-ryong, Customer] "Silver prices have gone up a lot. I brought all the silver spoons and chopsticks I could find in the house to sell. I'm thinking of stopping by my brother's house and see if he's got any silver I could sell."
The Jewelry District is not the only place where silver is sold and bought anymore. Markets, streetsand all crowded areas can see silver brokers waiting for potential clients.
People stop and ask about the price offered for silver cutlery. The surprising answer is definitely reason enough for them to go home and rummage through their dusty drawers.
[Interview : Lee Gang-ho, Street silver broker] "Silver prices have spiked, so many people think of selling their silver spoons in order to make some cash. Silver spoons and chopsticks were not considered that useful, but now they bring in a lot of cash."
[Interview : PD] "How much have silver prices risen[Interview : Kim Yong-seok, Professor of Chemistry
Hongik University] "Silver is the most efficient conductor of heat, and can conduct electricity as well. It is also the cheapest of all the noble metals that are not oxidized by the oxygen in the atmosphere, making it a highly-demanded product for industrial uses."
Silver has been used in tableware, film, and water filters for its resistance to oxidation and rust, as well as its antibacterial properties.
In recent years, silver has also started to become sought for batteries, semiconductors, and medical equipment. This is the main reason behind the sudden rise in silver prices, and with the expansion of silver use for industrial purposes, demand will continue to rise.
Another cause for the demand of silver to have increased is the rise in the price of gold! After the subprime mortgage crisis of 2008, more people decided to convert their assets to gold, raising its price and subsequently the price of silver, gold's substitute.
In March 2008, the price of gold hit the $1000 per ounce mark for the first time. The current price is at $1430 per ounce.
[Interview : Lee Jong-eun, Professor of Economics
Sejong University] "Gold has increasing value, so it is independent of inflation and any other political risks. This is why gold is regarded as a safe asset, especially during economic crises and recessions. In addition to that, speculators are eager to buy gold when these moments are detected. This is a typical self-fulfilling process."
The 3.75 grams of gold needed to make an average ring is now costing jewelers an agonizing $180.
[Interview : Baek Hui-jin, Owner of a jewelry store] "Gold is less accessible to customers because of its high price. The number of people who buy wedding gifts made of gold has decreased to about a tenth. We rarely get orders for wedding gifts. The price of gold has risen considerably, and people can't afford it."
[Interview : Yang Byeong-gwon, Owner of a jewelry store] "The price of gold used to stay at $60 or $70 per 3.75 grams. It was always under $89. But now the prices run at about $178 per 3.75 grams, and consumers are shying away from gold. That shows how serious the current state of the economy is."
Although the investment value of gold is still high, its cost makes it utterly inaccessible for the average person, and many believe that the price now has nowhere to go but down.
In contrast, most specialists and investment consultants believe that the price of silver will continue to rise. More than half of the world's silver is used in industies, and as industry expands with economic recovery, so will the demand for silver.
The price of silver is 1/40th that of gold, but its rate of return is already higher.
With the spike in gold prices, silver has also become more popular among jewelry buyers. Silver is now the trend in more ways than one!
[Interview : Shin Hye-yeong, Customer] "If the price of gold goes any higher, it'll become hard for people to prepare wedding gifts in gold. A lot of people will turn to silver. We as well minimized the amount of gold in our own wedding gifts."
[Interview : Im Ik-hwan, Customer] "In the past, people did not consider silver to be appropriate for wedding gifts, but these days the prices are as high as gold used to be. It seems all right to buy silver wedding gifts."
Demand for silver is rising in parallel in both the jewelry and industrial markets. There is no doubt that silver will continue to be an excellent investment commodity in years to come.
[Interview : Song Won-geun, Researcher
Korea Economic Research Institute] "Silver is a very attractive commodity for investors. First of all, compared to gold, it is much cheaper. In the year 2000, silver provided a 70% annual rate of return."
Silver attracts aesthetes with its luster, and the less aesthetically inclined with its practicality. 2011 is a prime year for silver, and the prospects of those investing in silver are as sparkly as the metal itself.